2Oct
Senate backs revision of bail-out package
The UK mortgage market may be on course for an improvement in
liquidity conditions after the US moved a step closer to agreeing a
revised rescue package for its banking system.
An amended plan has been passed 74-25 by the Senate and will now be
put before Congress, which rejected the original plan on Monday
this week.
The new package still includes the $700 billion (£380 billion)
bail-out, but also involves providing tax breaks for businesses and
middle-income earners in a bid to reassure members of Congress who
are concerned about the burden the deal imposes on taxpayers.
Should the measure now be passed, the consequent effects on
confidence and liquidity could see a fall in interbank lending
rates, enabling UK lenders to offer cheaper mortgages and loosen
their lending criteria.
Nationwide said today that the recent "turmoil" resulting from the
economic situation was a major cause of the fall in UK house prices
in September.
